What is passive income for life insurance agents?
Benefit #4: Passive Income
Residual income is also called passive or recurring income. These are commissions tied to premium payments. The insurance company receives a commission by the time of the sale, then the agent receives an additional payment every time the policy holder renews the policy.
Passive income is money that requires limited work to earn. Sources of passive income can include fixed income investments, life insurance dividends and side gigs. Your financial advisor can recommend passive income strategies that complement your larger financial plan.
Becoming an insurance agent can be a great side hustle for those looking to earn extra income while helping others and growing personally. With a bit of training and networking, you can start building your client base and earning commissions in no time.
A career as a life insurance agent has many pluses: being your own boss, making your own work schedule, and earning upfront and renewal commissions. Renewal commissions are the same as residual income because it pays you for services you have already performed, as in selling a life insurance policy that renews.
Passive income includes regular earnings from a source other than an employer or contractor. The Internal Revenue Service (IRS) says passive income can come from two sources: rental property or a business in which one does not actively participate, such as being paid book royalties or stock dividends.
Annual income for a life insurance agent can vary from as little as $28,000 per year to as much as $125,000 per year. How much money you can make selling life insurance will depend on a variety of factors, including your own ability to convert leads to customers, as well as the area in which you live.
The Bottom Line. Those who have a knack for selling life insurance, and the perseverance to grind through the tough early years, can make a lot of money and retire with a high degree of financial worth. However, life insurance agents, to be successful, must accept short-term pain in exchange for long-term gain.
𝐀𝐮𝐭𝐡𝐨𝐫 | 𝑻𝒆𝒂𝒄𝒉𝒊𝒏𝒈 𝑷𝒂𝒔𝒔𝒊𝒗𝒆…
A more accurate statement is that 93% of agents choose to leave within three years. Today, we're discussing the primary reason I believe agents are leaving this business. Before diving in, I want to share my inspiration for this article.
The classic 10x rule1
The 10x rule simply means you take your annual salary and multiply it by 10 to determine how much life insurance you need. So, if you make $50,000, you would use $500,000 as your base life insurance amount.
Who is the highest paid life insurance agent?
- Meet the world's highest earning insurance agent.
- Gideon du Plessis failed in the 10th standard and never went to college. ...
- A record he has maintained over the last 12-14 years, selling 700 policies yearly. ...
- What is Plessis' secret of success?
Some agents, advisors, and multi-line agents made a million dollars in the first year they worked with us selling life insurance! While most of the others it took 2, 3, or more years to make a million dollars per year selling life insurance. (We are not recruiters.
If you have a great work ethic and are willing to place yourself out there to establish relationships with clients, you will get more opportunities to earn a higher income. Selling insurance may even make you a millionaire.
Most professionals who sell insurance are paid largely on a commission basis. In fact, most agents aren't even employees of the carrier. More often than not, they're independent contractors who are compensated based on how much they sell, with higher commissions for certain types of products.
There's two big reasons why insurance agents quit: they don't feel valued, and they aren't given the technology they need to do their jobs well. In addition, managing commissions while hitting performance goals is a stressful part of the job for many insurance agents.
For every policy sold, the insurance agent earns a large upfront commission. This rate can range from 40% to 100% of the first-year premium, the amount the policyholder pays for the policy. The rate is set by the insurance company, and each state has its own commission limits.
- Rental properties: Purchase real estate to rent out for monthly income.
- Stock market investments: Invest in stocks, bonds, or mutual funds for potential dividends and capital gains.
- Spare room rentals: Rent out extra space in your home.
- Car rentals: Offer your vehicle for rent.
One of the biggest sales challenges in life insurance is getting behind what you're selling, and if you don't believe in the company you are selling for, you're doing yourself and your prospects a disservice.
5. The life insurance industry can be demanding. Becoming a life insurance agent isn't always sunshine and roses. There are cons to consider such as the demanding nature of the industry – especially when dealing with strict regulations, navigating complex paperwork, and fielding inquiries from clients.
Why Is Life Insurance So Hard To Sell? It's hard to sell because it deals with the topic of death. That's something many people find difficult to consider or discuss. Furthermore, it's hard to keep trying to sell because agents find that they can't make enough money to support themselves.
Is selling life insurance a good side hustle?
As you work toward financial independence, selling life insurance as a side hustle can be one of the greatest options to boost your income. Depending on your side hustle, it can provide you with greater financial freedom and flexibility for a good work-life balance.
- Advance Team Partners. 1.9. $108K - $188K. /yr. ...
- Lionheart Advisors. $104K - $190K. /yr. ...
- Spring Venture Group. 3.6. $100K - $173K. ...
- New York Life. 3.7. $98K - $170K. ...
- Outlook Advisors. 2.1. $98K - $170K. ...
- National Agents Alliance. 3.8. $94K - $172K. ...
- eFinancial. 3.6. $91K - $158K. ...
- Blue Wave Financial. 4.4. $91K - $153K.
Failure to work hard is one of the top reasons people in this industry want to call it quits. While it's true that this job isn't easy, it's also true that it can be very rewarding when you allow it to be. As an insurance agent, you have daily opportunities to change your clients' lives for the better.
Life insurance is the most profitable—and the hardest—type of insurance to sell. With the highest premiums and the longest-running contract, it brings in cash over a long period of time. In the first year, agents make the largest annual sum on a policy, bringing in anywhere from 40–120% of the policy premium.
While there are many kinds of insurance (ranging from auto insurance to health insurance), the most lucrative career in the insurance field is for those selling life insurance.
